Monday, July 25, 2005

Rents, democracy, aid - lit review

Nutshell précis: aid is not equivalent to rent because donors impose parameters on aid, either by imposing conditionality or by ringfencing aid for specific projects. Essentially, aid money is subject to scrutiny. Making aid like rent - through, for example, debt relief - isn't that good an idea.

Nutshell: Resource rents pervert democracy, reducing it to a competition for control of rents and patronage rather than a competition for the provision of public goods.

In the absence of resource rents democracies outperform autocracies, in the presence of large resource rents autocracies outperform democracies. ...We found that the antidote to these adverse effects of democracy was intensified checks and balances, including specifically, the freedom of the press.

Again, scrutiny appears to be the crucial factor - and given that rents make control of the political apparatus that much more lucrative, rentier states need particularly intense scrutiny.